The Ethereum market is booming as long-dormant “whales” (large investors with huge amounts of cryptocurrencies) have resurfaced and transferred large amounts of ETH to the Kraken exchange. While the move sparked speculation about a possible fall in prices, broader market trends suggest a more complicated picture.
On-chain analytics firm Spot On Chain revealed that investors who participated in Ethereum's initial coin offering (ICO) in 2014 recently deposited 1,069 ETH, worth approximately $3.56 million, into Kraken. .
Traditionally, deposits on exchanges are seen as a sign of intent to sell, which can put downward pressure on the ETH price.
This whale’s activity is particularly noteworthy in terms of its participation in the Ethereum ICO. Back in 2014, they acquired 12,566 ETH for just $0.30 per token. Although the recent transfer represents only a small portion of their holdings, the sale price (over $3,300 per ETH) represents a huge profit for early investors.
Ann #Ethereum #ICO Participant returned 1.12 years later and deposited 1,069 $ETH (from $3.56 million) #kraken 3 hours ago it was $3,329.
whales received 12,566 $ETH in #Ethereum Genesis, ICO price ~$0.31 in July 2015;
And it was distributed $ETH In 2017, it spanned 12 wallets, including… pic.twitter.com/Lid1hItGik
— Spotonchain (@spotonchain) April 6, 2024
Ethereum market shows signs of accumulation
While whale movements may signal a potential decline, on-chain data reveals broader trends that could offset the impact. According to blockchain analysis firm IntoTheBlock, there has been a significant outflow of ETH from crypto exchanges over the past quarter, totaling a staggering $4 billion.
This move suggests that many investors are accumulating ETH in anticipation of future price increases.
Ether market cap currently at $409 billion. Chart: TradingView.com
Dencun upgrade boosts Ethereum network activity
This news was announced following the successful Dencun upgrade of Ethereum, which took place in March 2024. The upgrade aims to address network scalability issues, specifically targeting high transaction fees and slow processing times.
IntoTheBlock reports a spike in activity for its main optimistic rollup (layer 2 scaling solution) following the upgrade, and early signs look positive.
Weekly transaction volume reached a high of 32 million, indicating an increase in network usage. Although gas prices have increased recently, many upgraded Layer 2 solutions are initially significantly cheaper.
Market uncertainty remains
The combined impact of whale sales, broader accumulation trends, and the impact of the Dencun upgrade on network activity makes it difficult to predict the near-term direction of the Ethereum market.
While a whale sell-off could cause prices to fall, the broader accumulation trend suggests underlying bullish sentiment. If Dencun's upgrades are successful in reducing transaction fees and increasing network usage, investor confidence could further increase.
Featured images from Pexels, charts from TradingView
